Turning over the Rock

OK. I realize that many properties in formerly "hot" areas (such as coastal Florida) are owned by investors/"real estate agents". Still, I was surprised when I decided to make some inquiries about cash flow for condos in a particular condo complex I'm interested in buying in the Mirarmar Beach area of Destin, Florida.

I sent five emails through VRBO ... Vacation Rentals by Owner ... website to owners of condos for rent in this complex, saying I was interested in coming down for a week to look at properties in Destin and needed a place to stay. Of the five emails I sent, every single one of them got back with me very quickly ... and every single on of them was a real estate agent. And every one of them said not only are their condos for rent, they're for sale as well.

One owner said, "we have four condos in this complex and we just built a large house in Destin and we are a little stretched" - I could hear the desperation in her voice and in her words. Another of the agents I spoke with who said she is considering putting her unit up for sale but is "not quite ready" and is "considering waiting till the price goes back from approx. $450K to $580K ... I asked her what about if it goes to $400,000 and then $350,000? She said, then she'd hold on to it. I could hear the pain in her voice, knowing she was losing every month, waiting for the market to turn around in the spring of 2007. I have news for her and all of them: the market won't turn around in the spring ... next year will be worse.

I have been watching these condos since January of this year. Prices have dropped on many units as much as 20%+. When they are down another 30%, then its time to buy.

The Coming Financial Holocaust

From CliveMaund.com ...

...those fortunate enough to own their own homes and other core assets, and possess a mix of quality gold mine stocks and physical gold will be amongst the few who survive this financial equivalent of a holocaust.


FIAT and CREDIT – “The coming Financial Holocaust”

The US has reached a level of debt saturation hitherto thought unimaginable and unsustainable, comprising, at its heart, mountainous mortgages and pyramiding credit card debt. More and more Americans have burdened themselves with maximum mortgages taken out with the perception of a real estate market set on an ever upwards trajectory. Most of these mortgages are at the limit that the mortgagee can support, and this sustained by ever more complex and financially dubious mortgage products increasingly designed to underwrite ARM (Adjustable Rate Mortgages) mortgages. This is little other than a horrifying scenario based on a "colossal leap of faith" in the persistence of low interest rates and economic naivety by the population at large;

This is a MUST read.

Get Gold

I said it before - get into gold ...

Housing Bubble Smack-Down

Give me 5 minutes and I’ll convince you that you should sell your house immediately and invest your life-savings in gold or a Swiss bank-account.

And More Lawsuits ...

This is going to really get ugly. I predict that in the next 6 months, there will be violence. Naive homebuyers sucked in by greedy real estate agents, sold on interest-only ARMS whose monthly payments are doubling and foreclosure looming - one of them is going to send a sleezy realtor to (in the words of Neal Boortz, radio talk show host) "take the eternal celestial dirt nap".

Mark my words - murder as a result of the housing bust will happen.

From the Arizona Republic ...

Grievances targeting agents rise

Complaints against real estate agents are on the rise, with consumers accusing them of everything from selling property without a license to cutting corners to make a sale.

As of June, the number of complaints opened with the Arizona Department of Real Estate had jumped 53 percent since 2003, the year before the housing boom took the Valley by storm. Complaints forwarded for discipline increased 150 percent in that same time.

More consumers are not only griping about the way they have been treated, but they're also alleging they have lost money in real estate deals. Agents found in violation of state laws that govern license holders can wind up paying fines or having their licenses suspended or revoked.

Housing Price Collapse Coming?

Funny, I thought the housing price collapse was well underway ...

US Stock to open lower after housing data

"The housing market is literally collapsing. Builders have already panicked, but we haven't yet seen the big collapse in prices because people believe their house is unique and they're unwilling to reduce prices to attract buyers," said Gary Shilling, president of A. Gary Shilling & Co. investment research firm in Springfield, New Jersey.

Destin Before and After

From 1964 to 2004 - What a difference four decades makes ...

Old Destin

From the Tuscaloosa, Alabama News ...

Old Destin is no more
For the last 20 years of so the name of the game down here has been real estate, "economic development," and the building boom, which has been through and couple of boom and bust cycles (it appears to be in the bust stage now, with speculators taking a well-deserved beating on all the overdevelopment), has transformed Destin ...

Amen - speculators take a beating as well they should. And it is at the expense of the speculators that I will own a condo in Destin at a reasonable price.

Good as Gold

Do your own due diligence, but I mentioned gold a few posts back. Today it broke a psychological resistance of $630 per ounce. I still think its up, up, up from here for gold (and silver too).

Gold up on firm oil prices firm, economic concerns

Chinese plans to diversify reserves into gold provides further support

Destin Prices Falling Like California Cities

Just like many California cities, Destin's prices go Boom to bust, almost overnight

2006 may well go down as the year Pluto was suddenly just another big rock, Brad and Angelina had a baby and the real estate market slid from great to miserable in a few short months.

Sales volume and prices are dropping in overpriced markets like California cities -- particularly San Diego -- some Florida cities, Northern Virginia and Las Vegas. In some markets, like Detroit, it is exceedingly difficult to sell a property at all. Prices declined in 13 of the 16 metro areas in Michigan.

Among prominent cities where second-quarter prices fell were: Boston-Cambridge, Cincinnati, Detroit, Indianapolis, Kansas City, Manchester, NH, Pittsburgh, Pa., Portland, Maine, Reno, Rochester, Minn., Toledo and Youngstown, Ohio. Prices fell in the California cities of Napa, Sacramento, Redding and San Luis Obispo, and in the Florida cities of Fort Walton Beach-Crestview-Destin and Punta Gorda.

This thing is snowballing. At one point, it looked like it might take at least a couple more years for prices to bottom out, but at this rate, we're going to see 50%+ decreases from the highs within 9 months. Will they go lower?. Whether we reach the bottom sooner or whether we reach it later, its going to take years before prices rise again. A lot of people are going to take a beating and stay down. For those of you waiting for the bottom, patience - it won't be long at this rate.